Permian to Buy Occidental West Texas Assets for $817.5 Million

By David Wethe

July 29, 2024 at 7:11AM EDT

Signage is displayed outside of Occidental Petroleum Corp. headquarters in Carlsbad, New Mexico, U.S., on Friday, Sept. 11, 2020. With the U.S. oil industry reeling from the collapse in demand this year, the New Mexico shale patch has emerged as the go-to spot for drillers desperate to squeeze as much crude from the ground without bleeding cash. Theres just one problem: Joe Biden wants to ban new fracking there. Photographer: Bloomberg/Bloomberg (Bloomberg/Photographer: Bloomberg/Bloomber)

(Bloomberg) -- Permian Resources Corp. will buy some of Occidental Petroleum Corp.’s West Texas assets for $817.5 million, it said in a statement.

The deal is part of Occidental’s previously announced plan to divest assets to help fund its acquisition of closely held CrownRock LP.

Permian will acquire 29,500 net acres and 9,900 net royalty acres, mainly in Reeves County. The deal will be effective as of July 1, with closing expected by the end of the third quarter.

“This acquisition is a natural fit for us given its high-return inventory and proximity to our current operated position,” said Permian Resources co-Chief Executive Officer Will Hickey.

The assets are on the Permian Basin’s western side in an area known as the Barilla Draw region.

Occidental said as recently as May that it was fielding a lot of interest from potential buyers and was confident it could sell as much as $6 billion of assets.

The US oil and gas industry has undergone a $200 billion consolidation wave over the past year, with companies looking to improve efficiencies, extend their inventory of quality drilling sites and return cash to investors.